Wholesaling Wholesale markets develop in a number of stages. They start as general markets, then become more specialized by trading in...
Wholesaling
Wholesale markets develop in a number of stages. They start as general markets, then become more specialized by trading in specific types of product. A later stage is to transact only graded and well packaged produce. A recent trend in Western Europe and the USA is for large retailers to by-pass the wholesale market system. Direct links are created between producers and supermarket chains, often by means of contract farming arrangements or through the use of preferred suppliers. Following the collapse of the iron curtain a large number of markets were developed in Eastern and Central Europe in the 1990s and early 2000s. Examples include markets in Warsaw, Gdansk, Budapest, and Bucharest. In other parts of the world, new markets have been built in Amman, Cairo and Mumbai, among many recent developments. Very few new wholesale markets have been built in western countries in the last decades, although old markets have been relocated to new sites (e.g. the new Covent Garden Market relocated to Nine Elms in London and Rome's new wholesale market, relocated from the centre to the east of the city). Those that already exist have tended to also attract warehouses for integrated food distribution, changing their role to "food centers" (in the USA) and including other non-fresh food products. Wholesale markets still have a role in the marketing of horticultural produce but the traditional fresh meat and fish wholesale markets, particularly those dealing with wholesale live produce, are generally being closed down in major urban centres. In developing countries, changes in work patterns, particularly the employment of women, and the impact of technological innovations in post-harvest handling, food processing and storage, including the use of domestic refrigerators, tends to encourage the development of one-stop shopping at supermarkets, often on a once-a-week basis. The challenge for wholesale markets in such a trading environment is to retain turnover, both by providing new services to supermarkets and by developing services to the non-supermarket trade and the growing hotel and catering sectors.
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Types of wholesale market
Secondary wholesale markets are generally found only in developing countries these days. They are located in district or regional cities and take the bulk of their produce from rural assembly markets located in production areas, where the transactions are small scale and usually take place between farmers and traders. The distinction between rural assembly markets and secondary wholesale markets is that secondary wholesale markets are in permanent operation (rather than being seasonal in nature or dealing in specialized produce), larger volumes of produce are traded than at the rural assembly markets and specialized functions may be present, such as commission agents and brokers.Wholesaling include all the activity involved in selling goods and services to those buying for resale or business use .Firms engaged primarily in wholesaling are called wholesalers.
Wholesalers buy mostly from producers and sell mostly to retailers, industrial consumers, and other wholesalers.
Types of wholesalers
- Merchant wholesalers
- Agents
- Brokers
1) Merchant wholesalers are the largest single group of wholesalers, accounting for roughly 50 percent of all wholesaling . Merchant wholesalers include two broad types full service wholesalers and limited service wholesalers .
2) Brokers and agents differ from merchant wholesalers in two ways: They do not take title to goods and they perform few function like merchant wholesalers, Like merchant wholesalers, they generally specialize by product line or customer type. A broker brings buyers and sellers together and assists in negotiation. Agents represent buyers or sellers on more permanent basis .
Terminal wholesale markets are located in major metropolitan areas, where produce is finally channelled to consumers through trade between wholesalers and retailers, caterers, etc. Produce may also be assembled for export. In some countries, such as India and China, terminal markets also supply other parts of the country. For example, New Delhi serves as a distribution centre to the south of India for apples grown in the Himalayan foothills. The problems of terminal wholesale markets are usually ones of congestion caused by an unsuitable location or by an inappropriate mixture of wholesale and retail functions. Traditionally, wholesale markets were built adjacent to city centres, located at a focal point of the inter-city transport facilities and close to the main retailing areas. Population growth, changes in urban land-use patterns and the development of modern transport systems have all influenced the suitability and functionality of existing sites
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